Speech by Abebe Aemro Selassie, IMF Director, African Department
Global headwinds continue to test Africa’s recovery and resilience – Speech by Abebe Aemro Selassie, IMF Director, African Department, during the release of the IMF’s October Regional Economic Outlook for sub-Saharan Africa at the going 2025 Annual Meetings of the Fund and World Bank.
Good morning, and good afternoon to colleagues joining us from outside the US. Thank you for being here today for the release of the IMF’s October Regional Economic Outlook for sub-Saharan Africa.
Six months ago, our assessment highlighted the region’s strong policy efforts and that growth had exceeded expectations in 2024. But we also noted a sudden realignment of global priorities and increasingly turbulent external conditions—marked by weaker demand, softer commodity prices, and tighter financial markets.
Today, these global headwinds continue to test the region’s recovery and resilience.
Sub-Saharan Africa’s economic growth is projected to hold steady at 4.1 percent in 2025, with a modest pickup expected in 2026. This reflects ongoing progress in macroeconomic stabilization and reform efforts across key economies.
Several countries—Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda—are among the world’s fastest-growing. However, resource-intensive, and conflict-affected countries continue to face significant challenges, with only modest gains in income per capita.
The external environment remains challenging. Global growth is slowing, and commodity prices are diverging. Oil prices are declining, while prices for cocoa, coffee, copper, and gold remain elevated.
External financing terms have improved somewhat, allowing a few countries, notably Kenya and Angola most recently, to access international capital markets.
The global trade policy and aid landscape has also deteriorated. Tariffs on exports to the United States have increased, and preferential access under the African Growth and Opportunity Act has expired. While the direct exposure is relatively modest for most countries in the region, broader trade policy uncertainty is weighing on growth.
The projected sharp decline in foreign aid leaves several lower-income and fragile economies particularly exposed. Affected governments have sought to reallocate budgetary resources but with limited fiscal space, they have limited room for maneuver.
It is encouraging to see the region showing remarkable resilience.
Although this will continue to be tested in the coming months. Pressure points include:
• Rising debt service costs, which are crowding out development spending,
• A shift toward domestic financing that is deepening the sovereign-bank nexus,
• Inflation that has eased at the regional level but remains in double digits in about one-fifth of the region, and
• External buffers that are under pressure and need to be rebuilt.
Against this difficult backdrop, our October 2025 Regional Economic Outlook highlights two broad policy priorities.
First, domestic revenue mobilization:
There is significant potential for countries in the region to raise revenues through comprehensive tax policy reforms and improved tax administration. This includes modernizing tax systems through digitalization, streamlining inefficient tax expenditures, and strengthening enforcement via targeted compliance strategies.
However, these efforts must go beyond technical adjustments.
It will be essential to build public trust in tax institutions, strengthen institutional capacity, and conduct careful impact assessments—including distributional analysis—to ensure that reforms are both effective and equitable.
Second, debt management:
Enhancing debt transparency and strengthening public financial management can help reduce borrowing costs and unlock innovative financing. Publishing comprehensive debt data and reinforcing budget oversight are key steps forward.
These priorities are critical for building resilience and supporting inclusive, sustainable growth across sub-Saharan Africa.
Read also: Sub-Saharan Africa growth to remain steady at 4.1% in 2025 – IMF
The IMF remains committed to supporting the region. Since 2020, we have disbursed nearly $69 billion, including about $4 billion so far this year. Our capacity development efforts also remain substantial, with sub-Saharan Africa as the largest recipient.
Thank you for your attention. I am now happy to answer your questions.
